ASX lithium shares were among the top performers on the exchange amid all-time high lithium prices in 2022.
While concerns over a potential short-term oversupply of the battery-critical metal has pressured lithium stocks more recently, that hasn't stopped one-time short seller Tim Murray from joining forces with Anson Resources Ltd (ASX: ASN).
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ASX lithium share may have found 'the Holy Grail of mining'
Murray, the former managing partner of J Capital, an activist short seller, was amongst the loudest critics of the lithium boom and wrote reports highlighting why he thought a number of ASX lithium shares were on shaky ground.
Now he's singing a slightly different tune, after signing on with Anson Resources in January as the miner's chief operating officer (COO).
To be clear, he's not bullish on all ASX lithium shares. But he highlights the potential for Anson Resources to use direct lithium extraction (DLE) to produce lithium in a far more environmentally friendly way than conventional methods.
"It's sort of like the Holy Grail in lithium mining," Murray said (courtesy of The Australian Financial Review).
Murray said the standard process used to produce lithium to make batteries "involves a lot of waste" with evaporation ponds.
According to Murray:
It's dirty, there's lots of water and chemical usage, lots of coal power too. But this is different, that's why it's so attractive because you get green lithium through this process. That's how I went from sceptic to believer.
Anson Resources' core asset is the Paradox Lithium Project in the US state of Utah.
But there's a long road ahead before the miner realises any potentially successful DLE production. The company had $45 million in cash as at 31 December, and forecasts it will need more than $700 million to get Paradox up and running.
However, Murray pointed to Anson's agreement with China-based Sunresin to license its proven DLE technology as giving the ASX lithium share a big edge over its rivals.
"Anson is way ahead of other companies. Sunresin is a big deal. A lot of other players are just a few mates in a shed tinkering with some test tubes," he said (quoted by the AFR).
As part of the S&P Dow Jones Indices quarterly rebalance of the S&P/ASX Indices, Anson resources will be added to the All Ordinaries Index (ASX: XAO) next Monday, 20 March.
Anson Resources share price snapshot
As you can see on the chart below, the ASX lithium share has been a strong performer over the past 12 months, up 75%.
The stock is up 17% so far in 2023.
